Buried Treasure

Bain Gets It: Procurement is an Undiscovered Treasure

II was recently talking with someone who was frustrated that “most of the good articles on procurement strategy in business seem to have been written five to ten years ago.” And right on cue, I came across a piece by some partners at Bain entitled “Unearthing the Hidden Treasure of Procurement.” I strongly recommend that you read the article. It’s not long and you will get a significant return on your invested time. However, if you’re inclined towards bullet points, then you can take advantage of some of the key highlights I’ve identified.

Spend is a Big Issue

The largest single expense category for most firms? External purchasing, which averages a whopping 43% of total costs.

Procurement Savings Potential

Graph from https://www.bain.com/insights/unearthing-hidden-treasure-of-procurement/

Good Procurement Works Wonders

Bain has found the top procurement organizations can reduce an organization’s cost base by 8%-12% on average and then add 2%-3% annual savings on top of that.

Top Companies Buy Better and Spend Better

The two areas that get immediate focus when savings mandates are handed down are improved supplier selection and better price negotiation. Companies multiply their results when they take a step back, however, and rationalize their desired spend before diving into the sourcing process.

Close the Loop on Spending

Procurement manages spending on the category level. Stakeholders in business units manage their budgets across categories. The best companies make sure that category-level savings inform the current year’s budget to ensure that hard-won savings are not ill spent elsewhere.

People, Process, and Tools

Leading organizations have strong capabilities in all these areas: a capable team, running smart processes, empowered by specialized tools.

There’s a ton of great information in this piece and it’s densely packed. So if you were willing to spend the time reading this far, I’ll reiterate my previous suggestion that you read the article in its entirety.

Contracts are the center of many processes

Top 6 Contract Lifecycle Management Benefits and Best Practices

Contracts are a critically important aspect of business that require accuracy and proper oversight. The entire process of monitoring contracts can be a tedious one. Fortunately, technology now allows organizations to automate this process, ensuring greater efficiency, improved compliance with legal requirements, and even cost savings.

With a proper Contract Lifecycle Management (CLM) software in place, you’re essentially able to manage a contract proactively from the beginning of its lifecycle to its completion. If you’re wondering how, here are some of the key contract lifecycle management benefits and best practices to note:

1. Proactively assess and manage risks

In business, your ability to anticipate contractual risks is critical. Issues such as missed renewals, overlooking important amendments, and tracking compliance obligations are common among companies. However, all these can be managed with a dedicated platform, which can keep you informed of these key milestones while providing ready access to key provisions.

A centralized platform that can regulate processes serves to optimize available resources and significantly lowers contractual errors.

2. Ensure compliance of reporting

Compliance is critical for effective contract management. When businesses fail to meet contractual obligations, the risk of contract termination or litigation is increased. Its effect can be felt across multiple departments in your organization. You can avoid this, or at least minimize it, by making sure you are able to properly record and document compliance as it pertains to legal requirements.

3. Access a centralized repository for important data

One of the biggest advantages that a CLM platform can provide is its ability to house all contracts and peripheral documentation relevant to it in a central repository. With a CLM platform, your company is given an unparalleled level of transparency that allows your team to be more productive and focused. 

According to a study, employees typically spend 2.5 hours of their day just searching, managing, or editing documents they need. With a CLM platform, you can eliminate the need for team members to sift through paperwork manually. 

4. Track compliance of agreed supplier terms

Ensuring compliance from suppliers can be difficult and time-consuming. However, it’s a very important part of managing supplier relationships. Given that, any company that is unable to enforce the negotiated terms due to poor contract management will likely suffer from cost inefficiencies.

This may also result in penalties due to your inability to comply with the agreed terms; missing cost-saving opportunities from special terms or rebates; or even incur fees from payment errors that could all have been managed with efficient contract administration. When combined with Scorecarding, Contracts Administration can be even more effective.

5. Boost contract cycle efficiencies

The traditional contract lifestyle starts when a company identifies a need for a particular product or service, and it ends once that product or service is delivered or fulfilled. The entire cycle traditionally takes a while to complete. Good procurement managers know that as they work towards completion, there are certain opportunities for improvement, including saving money, improving delivery, and reducing cycle times. A CLM platform can organize the many moving parts and help contract managers identify where these opportunities are so they can take advantage of it.

6. Enhance supplier as well as customer relationships

Your ability to manage your contracts reflects directly on your organization. After all, contracts are one of the more important documents that drive your supplier and customer relationships. To that end, you want to be able to communicate that your business is valuable, reliable, and credible.

CLM can help fulfill obligations and go above supplier and customer expectations.

Contract administration tends to be viewed as tedious and challenging. A CLM platform can improve this area by streamlining the process through automation and digitization. If you would like to know how Vendorful can assist you with this process, get in touch with us today.

Team: Hands In!

4 Ways to Maximize Engagement with the Procurement Team

Companies with an effective procurement department in place understand just how critical the process is to business.

However, an established system doesn’t guarantee engagement. In fact, according to a Deloitte study, “Internally, engagement across the business remains an area of focus but, for many, a development point.” 

To date, many internal employees try to avoid going through the proper procurement channels. Some key departments feel that going through a standardized procurement system slows down the vendor search and evaluation process. Others think that it adds more bureaucracy to the procurement process, which doesn’t lend value to their work processes.

These reasons underscore the need for procurement professionals to find a way to proactively engage their stakeholders and increase purchasing efficiencies. Here are 4 ways you can do that.

 1. Focus on relationship building

 According to Chief Procurement Officers (CPOs) in a Deloitte study, 74% of CPOs cite “cost savings as the primary driver for performance measurement.” However, while cost savings is a critical driving force for following a systematic procurement process, highlighting another important advantage may prove to be as effective; thereby, helping to build better professional relationships with internal stakeholders.

When companies focus on cost efficiencies alone, it makes the process seem very transactional. Fusing this benefit with other long-term business advantages could provide stakeholders a valued overview of what the procurement department does. 

2. Empower efficiency without forcing policy

Often, established procurement processes are accompanied by new policies that demand employees to comply with the new system.

Instead of pushing for compliance by enforcing the need to comply with set policies, highlight the potential for improved efficiencies. Start by asking employees what they need, understand their challenges, and then present solutions your procurement team can help provide.  

For example, you could highlight how much time automating the procurement process can save for their department, and how your procurement team can assist with writing engaging RFP bids.

3. Make an effort to understand individual department needs

Even with standard processes, there is really no one-size-fits-all approach to efficient procurement. Procurement professionals should understand individual department needs to give them a tailored approach that will be supported by procurement systems your team has put in place.

For example, if you want to engage sales, be sure to reach out to the sales team and gather information about company products and their competition. If you want to learn more about marketing needs, inquire regarding how their department approaches branding and company positioning. For operations, find out what internal processes need additional support.

Knowing more about how your company’s individual departments operate means your procurement team can offer better solutions to their sourcing needs. Ultimately, it helps align your own procurement goals with each department’s objectives.

4. Explore other areas of value

Again, cost reduction may be at the top of every department’s priority list. However, there are other ways that procurement teams can provide value.

For instance, procurement teams are very knowledgeable about market trends. Data gathered from your research could very well be used for more insightful decision making for marketing and sales departments.

Bottom line…

Successful procurement teams with great engagement rates not only use the knowledge of having the necessary processes in place, but they also make sure their stakeholders are using it.

To find out how automating key procurement processes can help boost engagement, schedule a demo of our vendor management services.

Are your sourcing methods as effective as you think?

Quiz: Are Your Sourcing Methods as Effective as You Think?

If your procurement team is like the ones we usually encounter, then it’s a given that you would like to accomplish your work in the most efficient way possible. So, when traditional sourcing methods deliver the results you need, it’s natural that you stick with them.

However, staying competitive and keeping up with the rapid changes in the business world requires you to take a more forward-thinking approach. Technology means you now have the option do things faster and better. For example, eSourcing platforms help expand your reach as you search for new suppliers or product sources, and can do so at a more competitive cost. With a solutions landscape that has evolved considerably in recent years, there’s no better time than now to reevaluate whether your current sourcing methods are as effective as you think. (And if you are part of the aforementioned procurement teams that we encounter, you’re undoubtedly in the midst of this reevaluation process.)

To assess what you can do to improve your processes, take this brief quiz below. Read through the questions and give yourself a point for each YES answer.

  1. My team and I use a lot of documents, emails, and spreadsheets to manage our sourcing and procurement methods efficiently.
  2. The lack of visibility and transparency in traditional procurement methods means I have to spend more time managing and monitoring bids and proposals than doing productive work.
  3. I tend to spend a lot of time coordinating between suppliers and internal stakeholders to ensure everyone is in the loop.
  4. The prospect of sourcing new products or suppliers feels tedious and daunting, and usually costs a lot of money.
  5. It takes us a lot of time to prepare a proposal to send out to prospective bidders.
  6. It regularly takes our team weeks, or even months, to find the right supplier that meets our stakeholders’ requirements.
  7. Our suppliers tend to feel that we’re pitting them against each other, which creates tension in the relationship.
  8. Our relationships with our network of suppliers can be strained, especially when we are trying to get the best price for our requirements.
  9. Our team finds it difficult to find new suppliers to participate in the sourcing process.
  10. Objectively speaking, our team finds that our current processes can definitely be improved to be faster, more transparent, and cost efficient.

Now, add up the number of times you answered YES to the above questions.

If you totaled 3-5:

Reevaluate your current processes. Your methods may be effective at the moment, but there could be room for improvement. At the rate businesses are evolving, you might find it harder to keep up with the demands of clients and suppliers down the line. At this point, it would be very helpful to find new ways to keep your procurement team focused and motivated—whether through additional coaching, training or by introducing new tools to help them improve current practices.

If you added up 5 or more:

You clearly need to find a new approach to ensure that your company maintains efficiency and efficacy in spite of apparent sourcing challenges. You might consider leveraging sourcing tools that can offer transparency, streamline communication, improve sourcing practices, and manage supplier relationships all in a single eSourcing platform.

Take advantage of Vendorful’s eSourcing and vendor management platform and find out how you can use it to improve your sourcing methods. Contact us today.

Busting myths about reverse auctions

Busting the 6 Biggest Reverse Auction Myths

The benefits of Reverse Auctions might seem obvious to many. That begs the question — why aren’t they more common? Perhaps the reluctance to use the stems from the myths that prevent organizations from recognizing how they can improve efficiencies, save money, and build better supplier relationships.

To that end, we’ve run down a list of the biggest myths surrounding the Reverse Auction process below and provided some information that, we hope, will increase your comfort level.

1. Reverse Auctions can only be used for procurement in the private sector.

Not true. In fact, federal agencies are leading the way in the public sector when it comes to the adoption of real-time competitive bidding. As far back as 2012, the US government has awarded $1 billion in contracts. Establishing Reverse Auctions as a best practice has ultimately allowed public entities to save millions annually.

2. Reverse Auctions are only applicable for blue-chip companies.

Outside the public sector, Reverse Auctions may have seen broader adoption by larger organizations like Fortune 500 companies as a way to streamline their negotiation process. However, in recent years, small to medium enterprises have also begun to recognize both the value and applicability of such a process.

3. Reverse Auctions are expensive — shifting to this process will be costly.

Reverse Auction platforms are now available as a cloud-based service. This significantly lowers the overhead cost for a business. Following the software-as-a-service model, upfront costs are also reduced. The simplicity and intuitiveness of most platforms also ensure that there is minimal employee training involved. (And per myth #2, more competitively priced, easier-to-use tools have made Reverse Auctions a practical consideration for organizations of all sizes.)

4. Reverse Auctions can only be used to procure commodity goods — they can’t be used to purchase services.

Both goods and services can be effectively purchased following a Reverse Auction negotiation process.

There’s a misconception that services aren’t ideal for the Reverse Auction process given that services typically have dynamic quantities and requirements. Broadly, that may be true, but it doesn’t mean that Reverse Auctions should never be considered when contemplating a service. Indeed when the scope of service can be clearly defined, a Reverse Auction may well be the best approach. It helps organizations determine fair pricing from potential suppliers, which ultimately helps reduce costs.

5. Reverse Auctions are detrimental to the buyer-supplier relationship.

In any business, maintaining good working relationships is key. This is perhaps the biggest reason why companies are so reluctant to use Reverse Auction platforms. The assumption is that given how Reverse Auctions pit suppliers against one another and generate downward price pressure on the supplier, the process can put a strain on your business’s relationship with potential suppliers.

However, no other platform can provide the level of transparency that Reverse Auction models offer. No other negotiation tool can benefit both purchasers and suppliers and support a fair, open bidding process. Quite simply, Reverse Auctions can actually help enhance trust and credibility. And by “negotiating in real-time,” all of the suppliers save valuable time, which they can leverage more productively. (Interestingly enough, just yesterday, a supplier reached out to us and inquired about how he could find more reverse auctions in which his company could compete. “We do really well there,” he said. “We’ve got a great supply chain.”)

6. Reverse Auctions put too much focus on price.

It’s typical to assume that the lowest bid in Reverse Auction events always wins. However, businesses aren’t bound to choose the cheapest offer. There is other critical information that eSourcing platforms can provide so businesses can weigh the cost against other factors such as past performance, supplier capabilities, support, and quality assurance.

Identifying these long-standing myths about Reverse Auctions and dispelling them is your first step towards tapping a beneficial platform for both your company and your suppliers.

Not using an eSourcing platform or stuck on a hard-to-use system? Contact us to find out more about what Vendorful can do for your business.

Real value of reverse auctions

5 Things that Highlight the Value of Reverse Auctions

Many companies are leveraging reverse auctions as a way to save money. However, cost savings are just one benefit that reverse auctions can provide.

Reverse auctions have the potential to be a critical aspect of your strategic sourcing process, and knowing their full potential is the first step towards maximizing their impact. Below are the top benefits of reverse auctions for organizations.

1. Cost savings

It may be just one of the benefits reverse auctions can provide, but it’s still an important one! Reducing procurement costs can significantly impact a company’s bottom line. In this article by CIO.com, they note that reverse auction software, can lower the cost of procuring products and services by as much as much as 20 percent.

Pitting sellers against each other on an open platform can increase competition and help drive down bids so that a business gets the best price for a particular event. This can allow companies to enjoy short-term profit increases, and long-term savings and investment.

2. Process efficiency

Reverse auctions can help streamline the procurement process, allowing for ease and speed of transactions. Where traditional, forward auctions typically take weeks to complete, online auctions can be concluded—with favorable results—in under an hour.

Documentation can be centralized, allowing for better organization. Coordination with suppliers is also easier given that communication and scheduling can be managed using a single platform.

3. Access to a large supplier base

Reverse auction software can help your team cast a much wider net to find the right supplier. According to Greg Brandyburry, President of RPDE Inc., “Non-incumbents love the transparent and fair process and market visibility when given. What I have seen through the years [is that] small suppliers can compete very nicely with large suppliers when a fair, transparent, level playing field is established.”

The evidence is more than anecdotal. In 2016, FedBid reported that for the prior fiscal year 88% of contracts awarded through their reverse auction platform went to small businesses. When suppliers are selected on the basis of who can provide the best value, rather than who has the more effective sales force, buyers and suppliers win.

4. Improve buyer-supplier relationships

There’s a long-standing assumption that reverse auctions tend to put a strain on buyer-supplier relationships. However, when done right, it can actually help improve working relationships.

On the premise that you’re conducting the whole bidding process openly and with a focus on transparency, you will be able to fairly assess each bidders capability objectively. This implies that you’re making an effort to level the playing field for all participants, which reflects positively on your organization’s values.

Furthermore, reverse auctions are respectful of your suppliers’ time. The whole auction, from start to finish, will likely be wrapped up in under an hour, meaning your suppliers – and you – can spend less time on the selection process and more time delivering value.

5. Increase market efficiency

It’s very difficult to bring multiple suppliers and a single buyer together in an open and constructive bidding environment. Online reverse auctions can help achieve this.

On an eSourcing platform, suppliers are able to view bids from competing vendors and can assess whether their own bids are up to par. Not only are you able to easily review the bids, but it also fosters healthy competition between participating suppliers.

Since the entire process takes place online, it’s easier for you to extend your supplier reach outside of your geographical limitations. This could ultimately lead to global searches that will provide the best cost-savings for your project.

Adoption of reverse auctions is rising simply because it has demonstrated its efficacy in delivering valuable results for businesses. Cost-savings, while an important and significant factor for choosing reverse auctions, isn’t the only thing that it can offer. As detailed above, the benefits of using this platform can be significant. It’s just a matter of learning and recognizing its inherent value for your organization.

Take advantage of Vendorful’s eSourcing platform and find out how you can get the most value out of it for your business. Get in touch with us today.

Improve your procurement process

4 Ways to Improve Procurement Processes and Boost Organizational Value

Procurement teams…those are the people who find an organization’s suppliers, right? If you’ve adopted this sort of limited view about procurement (or are surrounded by people who have), you’re (or they’re) gravely underestimating the impact of these teams. The procurement planning processes themselves and the people who are responsible for implementing them can affect almost all organizational departments directly or indirectly — which is why its role in any business is critical.

So how can you ensure that your procurement processes boost organizational value for your company? Consider some of the following tips:

1. Review your current procurement process

“But we’ve always done it this way.” It’s a familiar refrain, particularly when an organization has reached a certain level of success. Complacency is not an attribute that should be nurtured, however. Indeed, reviewing processes is a critical first step in streamlining the workflow of your procurement team. Doing so will drive new efficiencies, which will ultimately have a positive impact across your entire organization. But first, you have to be willing to conduct an honest assessment of current processes and protocols.

Not motivated to dive in? Remember: beyond obtaining goods and services, procurement teams are responsible for sifting through — and engaging with — suppliers that could potentially become long-term partners of your business. These partners have to align with the big picture goals of the entire organization and should share the complementary priorities and values. Given the strategic importance of this alignment, you can hopefully use the high-stakes nature of this undertaking to motivate yourself to see if the existing processes support this vision and then amending them if they don’t.

2. Focus on increasing employee skills through training

Continuing the training and development of employees is one of the leading factors that contribute to an organization’s success. Yet, in a survey conducted by Middlesex University Institute, 74% of the research subjects felt that they weren’t able to achieve their full potential in the workplace due to limited development opportunities.

This statistic presents a huge opportunity — one that we’ve empirically witnessed in procurement — in that new technology has been adopted to help employees learn new methods to improve their job performance. So much of our attention is devoted to procurement tools. (And this makes sense because we’re in the business of developing procurement tools!) However, to optimize the value of the tools, procurement professionals should be well equipped to use them. Distance learning, on-demand training, and more have created unprecedented access training.

3. Leverage an eSourcing platform

Leveraging a strategic sourcing template for RFPs, RFIs, and RFQs can give your procurement team more transparency and visibility regarding potential suppliers. It should make it easier for procurement teams to acquire a better understanding of what each supplier can bring to the table; as well as identify specific qualities that will allow them to see if they are a great fit for the organization.

Procurement teams are lauded for their ability to provide cost savings for companies as they source the goods and/or services required by their organizations. However, the goal isn’t necessarily to find the lowest price but to optimize for the highest value, a calculation that undoubtedly includes price. A robust eSourcing platform will help disentangle the qualitative and quantitative data, enabling procurement to select the suppliers that provide the best overall value in light of the selection criteria. The result? Strategic sourcing replaces tactical purchasing.

4. Cultivate good supplier relationships

If your organization is large enough to have a procurement team, then the success of the organization will be significantly impacted by the quality of its suppliers. In addition to maintaining active relationships, procurement teams are expected to have a network of qualified suppliers to which they send out bid requests when the need arises. Granted, you can simply seek out new suppliers when a new project or requirement comes along, but that can take a lot of time and effort. Essentially, doing so will require you to start over from scratch each time. Such delays from the procurement team’s side could cause a domino effect across the whole organization.

Similarly, once the people on a procurement team are engaged with a supplier, it’s incumbent on them to be an active participant in the relationship. Be sure to treat your suppliers fairly and conduct business with the utmost professionalism.

Keep these tips in mind if you want to improve your procurement team’s effectiveness. Remember, it’s not just about saving money or about putting out the current fire. Effective sourcing practices can have a positive chain reaction to your entire organization. So take a long view, tighten your processes, and get set up for success.

Take advantage of Vendorful’s eSourcing platform and find out how we can help improve your business operations. Get in touch with us today.

Important RFP Elements

Does Your RFP Contain These Important Elements?

Your ability to attract and engage quality bids is dependent on how well you begin your procurement process.

After all, the search for the right supplier isn’t simply just about cost-savings. It’s important to establish a balance between budget and quality, and assure that you will be forging a partnership that mutually benefits you and the supplier.

In many cases, achieving this starts with crafting a high-quality RFP (request for proposals): when your RFP outline is sub-optimal, the whole sourcing process is likely to deliver sub-optimal results.

With that in mind, it’s crucial that your RFP online contains all the important elements you require. Browse through the checklist below before sending out your next RFP.

1. Statement of Purpose

Your RFP should offer a brief explanation detailing exactly what you need, your purpose for sending the RFP, and what you hope to gain.

It should also include an outline of your target timeframe. Are you seeking a long-term supplier or a partner for a one-time project?

This section should be able to set clear expectations regarding your needs.

2. Introduction

Provide comprehensive background about your company. Your prospective bidders are of course expected to do their own research, but giving them an introduction will point them in the right direction.

Try to provide as much information that you believe will be relevant to your supplier’s ability to deliver a great proposal.

3. Timeline

Map out how long the entire process will take by providing a timeline. Establish closing dates for submitting the intention to bid and be specific about deadlines.

Make sure you provide a feasible timeline for your suppliers. Give them enough time to craft their responses so you receive quality proposals.

4. Goals

Were you able to articulate a clear set of goals in your RFP? Spelling it out clearly for your potential suppliers helps them focus on delivering what you actually need. Think about what your priorities are and what you’re working towards.

5. Deliverables

Explain the deliverables you expect to receive from each proposal. Typically, this should include items such as the plan of action, timelines, and ways forward specific to your project.

6. Pricing Template

While not necessarily a requirement, best practice shows that providing potential suppliers with a pre-designed pricing format where they can detail their pricing structure makes it easier to compare one bidder from another. It also makes it easier to ensure that there are no requirements that were left out.

7. Terms and Conditions

Comprehensive RFPs typically provide a pro-forma contract that details pertinent information about the working engagement. Typically, this includes details such as payment terms, penalties, incentives, breach of contract rules, and dispute resolutions.

8. Criteria for Evaluation

A critical element of the RFP is anchored on knowing exactly how you will make your decisions when it comes to choosing the winning bid. Suppliers have to know what you are prioritizing. For example, are you putting more weight on budget over timelines? Or is price negotiable as long as they are able to ensure quality of service?

9. Wish List

Make sure that your wish list is separate from your non-negotiables. You may want certain elements that would be great to have in the proposal, but aren’t necessarily needed. These could also be items that you’re not quite sure will fit your budget. Regardless of what you want to include, if it’s not a priority or a must-have, be sure to include it as a separate list.

While there isn’t a cut-and-dried way to construct an RFP, ensuring that the above items are included when sending it will raise your chances of receiving high quality, thoughtfully prepared proposals.

Take advantage of Vendorful’s eSourcing platform and find out how we can help you write better RFPs. Get in touch with us today.

Reasons your organization is no adopting eSourcing

Top 4 Reasons Your Organization is not Adopting eSourcing and How You Can Overcome Them

For any business that has used an eSourcing platform, the benefits are evident. Using tailored technology to streamline its procurement needs can provide an organization with significant cost savings, faster cycle times, more transparency, and better control over its sourcing requirements.

Despite the demonstrable success and a strong ROI story, eSourcing adoption remains low. As Jeff Gilkerson asks in his article for Spendmatters, “Why do 30 percent of organizations not have eSourcing tools when the benefits are widely known and accepted, the technology has been around for decades, and the tools can be obtained for a relatively low investment?”

Check out the following top concerns and some ideas about how you can overcome them.

  1. Employees are generally apprehensive about change

Any form of new technology can be overwhelming and intimidating for an organization. This is especially true for procurement teams that might be used to doing things the same way for years. Despite the fact that traditional methods of sourcing are tedious and time-consuming, there is a certain comfort in knowing that you’ve already mastered the steps you have to take to get the job done. A well-worn groove might have compromised structural integrity, but it is comforting. Conversely, anything that might disrupt a familiar sourcing sequence becomes a cause for apprehension.

Addressing potential discomfort from change requires patience from management and a commitment to support the transition to the new tools. Take the time to talk about the advantages of using an eSourcing platform. Make sure you answer the questions and dedicate time to train your employees so that they can see for themselves how eSourcing can help improve their productivity and efficacy.

  1. Some companies assume their sourcing needs can’t be addressed by technology

Without a clear understanding of eSourcing technology and what it can do, it’s very easy to assume that the platform simply won’t fit your specific requirements.

With a little research, however, it’s easy to see just how broadly applicable eSourcing platforms are, regardless of industry or nature of the business. No matter how large or small your company is, no matter how complex your project may be, eSourcing will likely prove to be a useful tool to streamline the bidding process as you search for partners and suppliers. But if you’re not convinced and have lingering concerns? Ask for a demo. Have a discussion with an eSourcing vendor. At the very least, explore the opportunities in front of you before resigning yourself to doing the same thing you’ve been doing.

  1. Some employees feel overwhelmed at the prospect of full transparency

There are numerous advantages to transparency. In fact, this is one of the main advantages of an eSourcing platform. Transparency, however, can have its drawbacks. In certain professional environments, an open process is one that is ripe for judgment as well as micromanagement. The irony here is that a strong eSourcing tool should empower — not disempower — procurement teams.

The key to managing this is to focus on processes and protocols. Leveraging a tool should provide tangible benefits and the opportunity to rethink and re-implement processes. By creating the right framework around the tool, an organization can mitigate the potential “risks” of transparency while setting up its procurement team for success.

  1. Procurement teams tend to use it without proper planning

Inasmuch as eSourcing platforms are intended to make everything easier for employees, it does require a bit of planning to execute everything seamlessly.

Often, in the interest of meeting a procurement team’s urgent sourcing requirements, stakeholders may point to eSourcing as a quick and easy solution, expecting immediate results. However, as with anything in business, great results require some forethought. As detailed above, you should be rethinking the process, not eliminating it. Even a great tool can be used incorrectly. To that end, clear objectives should be identified and workable criteria for evaluation should be defined. Remember eSourcing is a tool, not a replacement for critical thinking. You have to give the tool the right context and inputs to deliver the results you need.

Working with your procurement team regarding the best way to begin the eSourcing process is a great way to ensure that you drive the best outcomes.

When it comes to procurement technology, eSourcing platforms can prove to be a boon for all kinds of organizations. And while there are risks and concerns with adopting any new technology, a thoughtful approach should allow you to address them head-on.

Take advantage of Vendorful’s eSourcing platform and find out how we can help improve your procurement process. Send a message to Vendorful today.

Create an RFP that gets results

How to Create an RFP that Gets Results

The efficacy of procurement teams is tethered to knowing and understanding what they are purchasing and why. Think this seems straightforward? Think again. Large enterprises might have vendor rosters numbering in the thousands that cut across numerous categories. And most of the ongoing vendor engagement is in the hands of stakeholders, who all too often, sit in virtual silos. So what can procurement teams do to address this? Actually, there are lots of things. But for the purpose of this post, let’s focus on maximizing the chances that the best-aligned vendors are engaged. A key tactic to engage involves leveraging procurement’s favorite three-letter acronym — the RFP (request for proposal). An RFP allows an organization to assess whether the supplier’s goods and/or services are actually going to meet its needs.

With that in mind, it’s critical that the RFP proposal is able to draw out the best answers from your potential suppliers. Therefore, it has to be prepared thoughtfully and with care.

The following steps will help to ensure this:

1. Do your research

Start by embracing the requirements gathering process. Engage with stakeholders and establish what problems they are trying to solve and understand both the parameters and constraints surrounding them. Collectively, you should determine what they actually need, which will help you draft an RFP proposal that drives specific results. Are there key areas that you want your prospective suppliers to address? Be sure to understand what elements are actually feasible and in scope. You want to take care to avoid wasting the supplier’s time — and yours — by providing an RFP to which they can reasonably respond.

If you’ve done your homework upfront, then you can be realistic about setting expectations and tie them to measurable and quantifiable company objectives.

2. Identify your ideal supplier

Different suppliers will provide different proposals. Each supplier endeavors to provide its unique viewpoint. Their approaches and solutions will vary and each one will likely have its own strengths and weaknesses. While some suppliers will focus on cost, others will attempt to win you over by providing the most comprehensive service. Others may focus on speed or support. Create a clear picture of your winning criteria to minimize the difficulty in assessing what each bid has to offer. As you write your RFP, be sure to also note what qualities your winning bid will have.

Remember: value is ultimately dynamic in nature and can change situationally. While you might be particularly priced sensitive with one purchase, you might find yourself more time-sensitive with another. By establishing the key drivers of your decision, and if possible, weighting your RFP accordingly, you increase the likelihood of strong alignment with the supplier you ultimately choose.

3. Organize your document

As a standard, any business-related document should be carefully and accurately written. This is especially true for RFPs. After all, your main goal is to find a vendor that will provide valuable goods or services for your company.

That said, be sure to outline what is needed in such a way that your priorities are clearly communicated to the potential supplier.

In general, you should be able to answer the following questions:

Why are you trying to find a supplier for this particular problem?

  • Who is the organization seeking this solution? (Provide a clear description of your organization.)
  • What is the nature of your project and what is required from your suppliers?
  • When do you need the proposal or bid completed?

From here, it is easy to create a brief introduction that summarizes key bid points.

4. Clarify your evaluation criteria

When it comes to evaluation criteria, you are at liberty to provide as much information or as few details as you like. Generally, however, suppliers need some insight you will be judging their bids in order for them to focus their answers on your actual requirements. Undoubtedly, you will be better served by conveying your priorities. However, we would caution you not to share specific weighting criteria as you don’t want suppliers to “game their responses.”

5. Provide a detailed timeline

Explicitly detail the timeframe by which your RFPs need to be answered. Suppliers must know how much time they have to prepare their responses.

For a clear and comprehensive reply, establish reasonable deadlines. Remember, complex bids require weeks of preparation (sometimes more!) and it’s unreasonable to demand that they be submitted hurriedly.

Keep these points in mind the next time you’re writing an RFP. These simple tips can help ensure that you send out an engaging and effective RFP that attracts the best bids from potential suppliers.

Take advantage of Vendorful’s eSourcing platform and find out how we can help improve your procurement process. Send a message to Vendorful today.